The Difference Between Serving Startups and Scaleups

City leaders have the power to help local entrepreneurs start, scale, and retain their businesses – but each stage of development calls for different tactics.

Local elected officials have the influence required to pull specific city policy levers and build a supportive environment for small businesses and startups. (Getty Images)

This is a guest post by Penny Lewandowski, a NLC University seminar speaker. The post was originally published here.

In the business arena, one size does not always fit all. Businesses come in different sizes, with different needs, cultures, methods of learning, and ways of communicating. And while it can be tempting for city officials to develop programs designed to serve everyone, this easy-way-out approach can be a quick road to failure – particularly with growth businesses that are often ignored simply because they are perceived as more challenging to serve.

Startups and small businesses are hungry – for information, for basic help, and to be around anyone who has taken the path before them and has lessons to share. Their issues are more operational than strategic, and a one-to-many approach works well since many of them are looking for the same thing. Startups are often willing to accept advice – and they love to network, so the more the merrier.

Second-stage businesses, or scaleups – those with 10 to 99 employees and revenues around $1 million to $50 million – face very different issues that are more strategic than operational. They are expanding their teams and markets and are sometimes in the process of diversifying industries. Scaleups are less likely to accept advice because there is a good chance they’ve already cultivated trusted sources of information.

So who do second-stage businesses trust? Their peers. Demonstrate you appreciate their differences by developing peer-to-peer networks such as CEO roundtables and putting them in front of research experts on strategic growth issues around market identification and expansion, competitor intelligence and digital marketing.

And when it comes to networking, growth companies are more selective. You’ll not likely find them at your after-hours social/networking events. Instead, get them together with a successful third-stage company willing to share their experiences – and watch the room light up. If you’re still stumped on how to serve these folks, just ask them what they need. I’ve seen amazingly innovative programs arise from one question: “What kept you up last night?”

Regardless of who you’re serving, remember the importance of speed to market. By the time you’ve finished your third study and sixth focus group, these folks have moved on to greener and speedier pastures, and you’re not likely to get them back. Gather information, get feedback, and get moving. While a one-size-fits-all approach sounds appealing, your companies will thank you for going the extra mile to understand how different they really are.

About the author: Penny Lewandowski is a senior consultant on external relations at the Edward Lowe Foundation. She is also a National League of Cities University (NLCU) seminar speaker at the 2017 Congressional City Conference. Click here to send Penny comments; click here to subscribe to her blog.